Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A- . The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and good cash flow from operations. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, IP's share price has jumped by 30.75%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, IP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 15.8%. Since the same quarter one year prior, revenues slightly increased by 5.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has remained constant at $879.00 million with no significant change when compared to the same quarter last year. This quarter, INTL PAPER CO's cash flow growth rate has remained relatively unchanged and is slightly below the industry average.
- INTL PAPER CO has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, INTL PAPER CO increased its bottom line by earning $2.88 versus $1.47 in the prior year. For the next year, the market is expecting a contraction of 16.7% in earnings ($2.40 versus $2.88).
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Paper & Forest Products industry and the overall market on the basis of return on equity, INTL PAPER CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
International Paper Company operates as a paper and packaging company in North America, Europe, Latin America, Russia, Asia, and north Africa. International has a market cap of $15.57 billion and is part of the consumer goods sector and consumer non-durables industry. The company has a P/E ratio of 18.9, above the S&P 500 P/E ratio of 17.7. Shares are up 19.8% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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